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Here’s Why BrightSphere Investment Group Stock Was Soaring on Friday

By Matthew Frankel, CFP® – Jun 26, 2020 at 3:51PM

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The asset management company’s stock was higher after a surprising report.

What happened

The stock market was having a terrible day on Friday with the Dow Jones Industrial Average and S&P 500 both down by more than 2% as of 3 p.m. EDT. However, there were some standouts.

One of the best performers of the day was BrightSphere Investment Group (BSIG -0.56%), a holding company for boutique asset management firms, whose stock was up by more than 16%. Earlier in the trading day, shares were up by more than 25% before losing a bit of momentum.

Businessmen looking at financial charts on a screen.

Image source: Getty Images.

So what

The catalyst driving the asset manager's stock price higher is a report that Italian insurance company Assicurazioni Generali SpA has approached the company about a possible buyout. The would-be acquirer -- better known as Generali Group -- is Italy's top insurance company, and the deal would allow it to expand its presence into the United States.

Now what

To be clear, the buyout report is unconfirmed at this point, and there isn't any buyout price mentioned in it, so today's stock price rise is purely speculative. Any buyout offer would need to be attractive enough to entice hedge fund Paulson & Co. to agree to be bought out. Paulson owns 25% of BrightSphere, and the fund's leader, John Paulson, is BrightSphere's chairman, so it's fair to say he has considerable influence over whether a deal could get done.

However, it's not inconceivable that the buyout offer could end up being more than 15% greater than Thursday's closing price. So there could be more upside ahead if and when more details emerge.

Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

BrightSphere Investment Group plc Stock Quote
BrightSphere Investment Group plc
BSIG
$15.86 (-0.56%) $0.09

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